ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintSite TitleTitle ChevronIcon Twitter
Energy

World biggest importer Japan to invest in LNG terminals across Asia

Government to expand funding to downstream infrastructure projects

An LNG carrier off the coast of Japan. Demand for the fuel is growing throughout Asia..   © Reuters

TOKYO -- Japan will support the construction of liquefied natural gas terminals across Asia, aiming to take a leading presence in the expanding market before its position as world's largest buyer is overtaken by China in the near future.

Japan currently supports companies involved in LNG projects through investment and loan guarantees via a government-backed natural resource company -- Japan Oil, Gas and Metals National Corp., or Jogmec.

However, Jogmec is limited to aiding upstream operations, such as natural gas exploration and liquefaction plant construction.

New legislation would allow Jogmec to support investment in projects further downstream, such as LNG terminals in other countries so that they can import the fuel. Transporting the fuel over long distance efficiently also requires LNG to be reloaded at transshipment facilities, the development of which will also be aided under the plan.

As a relatively clean carbon-based fuel, global LNG demand is projected to double by 2040, according to the International Energy Agency. Japan is currently the biggest importer, but consumption is forecast to grow rapidly in Asian countries, with China seen as the biggest importer in 2040.

The easing of Jogmec's aid of the construction of LNG terminals is expected to help corporate Japan expand trade with other consuming countries. By helping top producers, such as the U.S., expand sales destinations before Japan's position as the leading buyer declines, Tokyo hopes to take a central role in the growing market.

The variety of LNG sources also allows users to cut dependence on Middle East oil, an area under significant political risk. The Middle East is responsible for 60% of net exports of crude oil, but just 20% for LNG.

A stronger focus on transshipment facilities will also make it easier for Japan's private sector to take part in the rapid transport of Russian LNG via the Arctic Ocean.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends January 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media